AUD/JPY Downturn Likely to Continue as Private Sector Credit Growth Slows in Australia

Australia – Private Sector Credit

On Sunday, at GMT 7:30 p.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data. It measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.

Binary options traders think the private sector credit is an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.

Last month, the private sector credit in Australia increased by 0.4%. The forecast for this month was set at an increase of 0.3%. The actual figure came out at 0.3% as well.

Japan – Final Manufacturing PMI

On Thursday, at GMT 7:30 p.m., the Markit will release Japan’s final manufacturing purchasing managers’ index (PMI) figure. It measures the level of a diffusion index by surveying around 400 purchasing managers in the country.

Businesses are the first to react to changing economic climate. The manufacturing PMI is calculated based on survey questions covering employment, production, price levels, new orders situation. Also, it is based inventory conditions. Hence, binary options investors consider this data to be a leading indicator of the overall economic health of the country.

Last month, the Japan’s final manufacturing PMI reading came out at 52.4. The forecast for this month is currently set at a reading of 52.4 as well.

AUD/JPY Forecast


The AUD/JPY remained bearish since the start of December. Over the last month, it has fallen by around 640 pips. However, after reaching the 77.50 level, the AUD/JPY found a strong support last week. Although most central banks and markets will remain close this week due to the New Year Eve, we might see the AUD/JPY testing the 77.50 level once again this week.

The Australian Private Sector Credit growth declined from 0.4% last month to 0.3%. On the other hand, analysts are expecting the Japanese Final Manufacturing PMI to come out at 52.4, same as last month. We believe it would set a bearish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY closes below the support near 77.50, it would likely attract additional bearish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities below this major support level around 77.50.

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